Accounting
Intermediate

Working Capital

The short-term capital available to run day-to-day operations.

Formula

WC=Current Assets−Current LiabilitiesWC = Current\ Assets - Current\ Liabilities

Variables

WCWorking capital
Current AssetsShort-term assets
Current LiabilitiesShort-term debts

Example

$150k − $75k = $75k working capital

Did You Know?

Negative working capital is not always bad — fast-turnover retailers like supermarkets often run on it.

working capitalliquidityoperations